Work the Plan
Business Plan Basics | Components | Secrets
Every new business has its origins in a dream. The ones that are actually launched and go on to succeed also have a written plan. And while nothing pumps you up quite like sharing your enthusiasm for the dream with friends, family and anyone else you choose to tell, you will need more than bravado and a big idea to succeed. If you truly want to make your dream a reality and be taken seriously by potential funding sources, you will need to put a formal business plan on paper.
Business Plan Basics
What Is a Business Plan?
A business plan is a written document describing the nature of your business, how you plan to achieve your specific goals for this business and the profits you expect to gain as a result. Ideally, every business should have a written plan to use as an operational guide and as a tool for communicating its purpose and strategies to others. In that regard, simply putting your thoughts on paper is a useful exercise to help solidify your dream.
Why is a business plan important? If you intend to seek outside funding, a business plan is absolutely required, and it must encompass these four basic topics:
Business Concept What am I selling?
Market Assessment Who will buy my product or service? Who are my competitors?
Financial Assessment How much will people be willing to pay for my product or service? Can I make a profit at this?
Self Assessment Do I/we have what it takes to succeed?
Think of your business plan as a living document. Project your plans 3-5 years ahead, but allow for revisions as your goals change.
How to Structure Your Plan
A business plan is essentially a road map to follow on your journey to business success. Every formal business plan should include the following titled sections:
Executive Summary Highlight the strengths of your plan, including where you want to take your company and why your idea will be successful.
Company Description Make this your extended “elevator pitch” to help readers, especially potential investors, quickly grasp the uniqueness of your business.
Market Analysis Show that you understand your industry, target market, customers, competitors and pricing structure.
Organization and Management Describe your company’s organizational structure and introduce ownership and members of your management team.
Service or Product Line Emphasize the benefits you can provide to current and potential customers.
Marketing and Sales Explain how you plan to promote your product/service, create customers and boost sales.
Funding Request Lay out your current and future funding requirements, the intended use of any funds you may receive and the types of funding you would prefer.
Financial Projections Summarize your projected income and expenses, past credit history, intended allocation of resources and other financial details.
Appendix Supporting information and documents such as: your credit history; letters of reference; resumes of key managers; leases; licenses, permits and/or patents; a list of business consultants such as your attorney and accountant; and relevant research, magazine articles or book references.
Writing a business plan is not as difficult as it sounds and there is no need for you to reinvent the wheel.
You can access the list of business plan components and individual articles describing what to cover within each topic at sba.gov/writing-business-plan.
And if you’d like more personalized help with your plan, training and guidance are available through the Florida SBDC Network at FloridaSBDC.org.